Beef on the menu this Christmas -- but maybe not next

Beef is what's for Christmas dinner in many Bay Area households, but rising prices may soon push some families to swap their prime rib for chicken breast.

Shoppers mobbed the meat counters in grocery stores and neighborhood markets Monday to pick up a cut of beef for the centerpiece of Christmas dinner. Hidden from the shoppers who browsed the thick slabs of pink meat ready for roasting is the tumult in the beef industry, where a sharp decline in the number of cattle headed for slaughter has sent prices to record highs.

Those higher costs have nudged up prices ever so slightly at some grocers, and analysts predict beef prices will soon hit new highs at stores and restaurants.

November choice beef prices for retail were up about 3 percent over a year ago and 2.4 percent from the month before, according to U.S. Department of Agriculture data. Grocers and retailers said they are bracing themselves for 2013's beef prices.

"I don't even want to think about it," said Daniel Zanotto, one of the owners of Zanotto's Family Market in San Jose. "I've got to pay the bills."

Keeping the lights on should be easy for the family grocer this year anyway, as Zanotto and his crew scrambled to keep up with a throng of customers Monday.

Anna Martorana, of San Jose, was in the store to pick up a prime rib roast for dinner that cost $57.

"We do it every year," she said. "It's a tradition."

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She's not alone. At grocery stores and ethnic markets across the Bay Area, meat counters were mobbed with customers who waited for a carefully chosen cut of meat. Their menus varied, including family recipes, ethnic traditions and flavors from across the world.

But they all had one thing in common -- beef.

While beef consumption has fallen steadily in the U.S., with Americans becoming more health-conscious and the "pink slime" controversy over treated meat driving more people to alternatives like fish, Christmas remains an exception, according to butchers and grocery retailers around the Bay Area.

Even San Jose resident Valli Horwitz, who said she rarely has meat in her house and a daughter who is a vegan, was at Zanotto's to splurge for a sirloin.

Daniel Olveda, who works in the meat department at Sprouts Farmers Market in Walnut Creek, explained the appetite for beef at Christmas like this: "It's the same as the Thanksgiving turkey."

Shoppers were bolder in their meat selections at Mi Pueblo Food Center in Palo Alto. The expansive meat department features exotic choices like beef tongue and pig feet, along with the more standard beef fare. Shoppers walked away with bursting four- and five-pound plastic bags of beef and pork and said they were heading home to make tamales and posole, a traditional Mexican stew. The bags cost about $12 each. Shopper Francisco Ochoa, of Palo Alto, said he goes to Mi Pueblo because it's cheaper.

Regional retailers and ethnic markets are able to keep down the prices a bit better than larger chains. Some, like Zanotto's, deal directly with a single beef supplier and can negotiate better deals. Others say they have to offer holiday specials and discounts to survive in the ultracompetitive grocery market -- which is why the price increases have yet to really hit consumers in the Bay Area and shoppers say they're spending about the same as last year.

Zanotto said his store lost money by keeping costs low for customers after beef prices started to rise but finally bowed to market pressures and raised prices by 20 percent last year, and there's no guarantee they won't go up again. Supermarket industry expert David Livingston said other retailers will soon have no choice but to pass the price onto the customer.

"A lot of producers are eating the cost now, but they'll make it up down the road," he said.

And there's a lot to make up. Choice-beef prices have been running above year-ago levels for every month this year, and some experts have said the high prices are just a taste of what is to come. Droughts have driven up the price of cattle feed, and with reports of dry forecasts next year, some fear more loss of the nation's cattle herds.

Many shoppers are willing to splurge at Christmas. Joel Wealty, of Sunnyvale, said he's willing to spend a bit extra for a good prime rib: "It's a little more expensive to get a quality piece of meat. But it's worth it."

But shoppers on a budget or with extra-large dining room tables, like those at El Pueblo who said they were shopping for four or five families and preparing dinner for 30, may rethink their menu next year.

It may be turkey or chicken -- even pasta -- that's what's for dinner.